• Business
  • Published 2011

Downside Revenue Risk on 2012 Corn

@inproceedings{Schnitkey2011DownsideRR,
  title={Downside Revenue Risk on 2012 Corn},
  author={Gary D. Schnitkey},
  year={2011}
}
The likelihood of different prices is imputed from futures and options prices on September 2, 2011. The expected value at harvest of the December 2012 is $6.46 per bushel, the same as the price on September 2nd of the December 2012 corn contract. A $.35 cash basis is subtracted to arrive at a $6.11 expected cash price. CME options contract prices then are used to imply the distribution prices. Based on these procedures, 4 percent of the cash prices are expected to be below $4.00 per bushel at… CONTINUE READING